3 Answers
3

MPEx uses the last 7 decimals to identify individual deposits made to their publicly known deposit address. Here is a sample of how they do it:

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1
In order to make this deposit please send to the exchange address ( 1Fx3N5iFPDQxUKhhmDJqCMmi3U8Y7gSncx ) the sum of 10.03878878 BTC exactly. Your transaction will be manually approved, so please allow up to 48 hours for funds to show up in your account.
If your funds don't show up within 48 hours please contact mircea_popescu in #bitcoin-assets. Thank you.
-----BEGIN PGP SIGNATURE-----
Version: GnuPG v1.4.5 (GNU/Linux)
iD8DBQFQrFKnkhT8a/G2mSERAu4cAKCSkXszTDUquQT83nhzpXTlqxDd1ACgiBiO
gq0FBE+XYRV+AJrUHXuWC0E=
=2Azr
-----END PGP SIGNATURE-----

One idea that comes to mind is to use them as a transaction ID to bind the sender to the recipient instead of generating a unique Bitcoin address per sender. If done carefully, this may allow more versatile use of vanity addresses.

Since the address space of the transactions is relatively small (only 5 digits to play with), one idea is to use a random 4 digit suffix that is valid for a short period of time. Use the final / Fifth bit as a checksum that can also be ommitted if the conversion rate BTC to USD exceeds $100 but is below $999

Example

An item costs 10 BTC, and the buyer clicks "check out"

The seller creates a new transaction ID (9998) records it, and makes it expire in 1 day.

The seller calculates the checksum. Since the sum of 9+9+9+8 is 35, an odd number, the checksum is set to "1". (if it had been even the checksum would be "0")

On checkout the seller pays 10.00019998 BTC to the seller, possibly to a vanity address

The payment is received by the seller and visible in the transaction history.

The seller does checksum of the transaction (9998) with the checksum bit (1) and passes

The result is even so the transaction is valid (less likely a typo was made)

The seller looks up transaction ID 9998 in the database. If the Tx is invalid, or the date is greater than 24 hours, then a refund is sent to the seller.